Amid growing regulatory pressures and the appeal of high leverage, crypto trading platforms are increasingly relying on derivatives to attract a diverse investor base. Currently, derivatives, including futures and options, account for 71% of all crypto trading volumes, with open interest in these products hitting record highs at over $40 billion this year.
According to a report from the Financial Times, emerging trading platforms like D2X, One Trading, and GFO-X are entering the market to compete with established players such as CME Group, Binance, Bybit, and Kraken. These new platforms prioritize regulatory compliance, aiming to reassure investors concerned about potential SEC legal actions, often related to unregistered securities.
One Trading, which holds an EU regulatory license, is preparing for an extensive marketing campaign across Europe next year, showcasing its capabilities for both retail and institutional investors. Its primary focus will be on perpetual futures contracts, appealing to investors seeking diverse trading options within a regulated framework.
Rising Demand for Leverage as Traditional Lending Fades
Derivatives have gained popularity for providing traders with substantial leverage, enabling investments at a fraction of the asset’s cost. Leading platforms like Bybit and Kraken offer leverage up to 125x and 50x, respectively, especially valuable in a market where traditional crypto lending has declined following the collapse of lenders like Genesis and BlockFi.
Bitcoin ETFs Spark Interest in Derivatives
The recent surge in Bitcoin’s price, alongside the introduction of spot Bitcoin and Ether ETFs, has drawn new interest, leading exchanges to expand their derivatives offerings. CME Group, the leading derivatives exchange, continues to set trading volume records and is introducing new contract types to capture a broader audience. Derivatives are particularly appealing to regulated investors who prefer the capital efficiency and regulatory protections they offer, avoiding the risks of direct token trading.
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